AMAGAZINE

the South AfricA

issue No. 14 January 2014

venetia mineDe Beers’ vote

of confidence

2013 mininG LeKGOtLa: On the verge of positive change

Driving value through progressive

transformation

lindiwe zikhali

Shaping the future togetherOf the many challenges South Africa faces, unemployment remains the single

biggest obstacle to achieving inclusive economic growth. But how do we create a thriving, resilient economy in which people feel they have the opportunity to fulfil their potential and contribute to the wellbeing of the nation?

Government cannot tackle the challenges of job creation, inequality and poverty alleviation alone. I believe partnerships that enable both the public and private sectors can help achieve government’s shared goals and objectives, and are fundamental to stimulating economic growth and tackling poverty-related issues.

It is no surprise that companies, non-governmental organisations and international institutions all over the world acknowledge the significance of enterprise development in shaping South Africa’s future. Meaningful investment in enterprise development can create jobs, address social exclusion and remove barriers to wealth creation.

Set against a complex socio-economic backdrop, corporate South Africa can make a valuable contribution to promoting enterprise development by partnering with other players for greater effect and by looking at enterprise development as a strategic imperative of business moving forward.

Through Anglo American’s enterprise development initiative, Zimele, we have witnessed first-hand the difference funding, training and mentoring entrepreneurs in emerging businesses in mining communities can make.

From Anglo American’s significant investment in the Zimele initiative, it is apparent that proper financial and infrastructure support, such as accessible funding and finance, integrated support systems and job creation initiatives, are fundamental for enterprise development and will help grow any economy.

In this edition, you can read about the Sebenza Fund (see page 34), which launched last year and is in line with government’s policy that encourages public-private partnerships and enterprise developmental initiatives. This fund will channel a combined R500 million over a three-year period into communities with R250 million from the Development Bank of South Africa and R250 million from Anglo American.

By supporting deserving and passionate entrepreneurs these initiatives make a wider, meaningful and lasting contribution to the efforts to erase poverty and unemployment, while contributing to sustainable and inclusive economic growth and development in South Africa.

Only if all stakeholders in the mining industry, whether they be corporates, government, non-governmental organisations or communities and individuals, work together will we be able to find lasting solutions to achieve the country’s economic goals and secure the livelihood of its people.

WELCOME

Khanyisile Kweyamaexecutive Director,anglo americanin south africa

02 I JANUARY 2014

“Set against a complex socio-economic backdrop, corporate South Africa can make a valuable contribution to promoting enterprise development by partnering with other players for greater effect

and by looking at enterprise development as a strategic imperative of business moving forward.”

JANUARY 2014 I 03

ED’S NOTE

LETTER fRom ThE EdiToRWelcome to the January edition of A Magazine. Our publication is usually packed

with interesting features, exploring the many facets of Anglo American’s business in South Africa and I trust you will find this edition no exception.

First off, we take you behind the scenes in an interview with Lindiwe Zikhali, head of transformation and regulatory affairs. With the Mining Charter having been in place for a decade this year, she reflects on how successful the mining sector has been in meeting the Charter’s targets on transformation and how the process is likely to evolve over the coming years (see page 8).

In this edition you’ll also find that innovation remains critical for the future success of the mining industry and we explore various initiatives that are changing the way we operate, such as a new programme to combat diesel exhaust fumes (see page 16) and new safety systems that monitor ventilation underground in real time (see page 17). Stan Pillay, the Group’s manager: climate change and energy, explains how Anglo American’s approach to environmental management could help lead the way in the fight against climate change on page 30.

Other articles of interest in this edition include an advertising perspective on Anglo American’s advertising campaign and its evolution over the past four years from black and white to a vibrant, multi-colour and multi-media expression of the Group’s brand (see page 24).

And with enterprise development hailed as one of the most important ways to tackle poverty and inequality, we outline how the newly launched Sebenza Fund, part of our Zimele enterprise development initiative, is set to boost entrepreneurship on page 34.

I hope you find reading A Magazine as interesting as we found writing it.

ROCHELLE DE PAIVAEDITOR

“With enterprise development hailed as one of the most important ways to tackle poverty and inequality, we outline how

the newly launched Sebenza Fund, part of our Zimele enterprise development initiative, is set to boost entrepreneurship.”

04 I JANUARY 2014

06 FActs, stAts AND News iN A Nutshell

Transforming the education sector; Kumba earns Quills; Anglo American’s New Vaal colliery achieves UNAIDS three zeros; Anglo American Platinum judged one of the Top Five Gender Empowered Companies; the Kimberley Diamond Cup.

08 sPeciAl FeAtuRe

It’s 10 years since the original Mining Charter was implemented. We take stock of the transformation targets set for 2014.

12 ReAl MiNiNG

Anglo American at the Mining Lekgotla; a new environmental monitoring system at Zibulo colliery; investigating ways to decrease exposure to diesel exhaust fumes; FutureSmart will help the mining industry to become truly sustainable; Platinum is creating strength and sustainability; De Beers’ R20 billion vote of confidence for Venetia mine.

22 ReAl PeOPle

Norman Mbazima has the leading edge; attracting top talent with the Programme for Management Excellence and The Achievers’ Programme; the next phase of Anglo American’s advertising campaign: navigating the reputation economy authentically; Stan Pillay, the man behind the ECO2MAN programme.

32 ReAl DiFFeReNce

A progressive way to treat acid mine drainage is cleaning up the water and producing houses; Zimele’s new fund – The Sebenza Fund – aims to provide a community-based hub system; the lowdown on the Entrepreneur Internship Programme (EIP); De Beers plays a leading role in ensuring that diamonds traded globally are conflict-free.

The A Magazine is a quarterly publication of Anglo American in South Africa. For an electronic version, please visit www.angloamerican.co.za

Editorial enquiries: Rochelle de Paiva, tel: +27 (0)11 638 2725 e-mail: rochelle.depaiva@angloamerican.com

The opinions expressed by contributors do not necessarily represent the views of Anglo American. Provided that permission is obtained from the editor and on condition that acknowledgement is made to A Magazine, articles in this magazine can be reproduced in whole or in part. © Anglo American 2014

NOTE: Please note that any rand/dollar conversions contained in this edition are based on the exchange rate on the day of going to print. All dollar amounts denote US$.

“At Anglo American we are excited about what the future holds, as it represents an opportunity to continue to work towards what the Mining Charter sets out to achieve: an industry that proudly reflects the promise of a non-racial South Africa.”Lindiwe ZikhaLi, head of transformation and regulatoryaffairs at anglo american

IN THIS ISSUE

Diedre van Wyk is a plant

operator working at the Jig

Plant at Sishen Iron Ore mine.

JANUARY 2014 I 05

06 I JANUARY 2014

FACTS, STATS ANd NEWS IN A NUTSHELL

TRANSFORMING THE EDUCATION SECTORAnglo American’s contribution to the Sol Plaatje University in Kimberley shows the company’s commitment to South Africa and the Northern Cape province, which has hosted its mining operations for over 100 years.

The Sol Plaatje University, which began construction in Kimberley in September 2013, is named after Struggle stalwart Solomon

Tshekisho Plaatje, an intellectual, politician, translator and activist who died in 1932. It will be opening its doors early this year with an intake of 135 students. The projection is that by 2024 the intake will increase to 7,500 students.

Said Minister of Higher Education and Training Blade Nzimande: “It’s the first new university to be launched since 1994 and, as such, is a powerful symbol of the country’s democracy, inclusiveness and growth. It represents a new order of African intellect, with a firm focus on innovation and excellence.”

The only provinces that have not had universities have been Mpumalanga and the Northern Cape. The Sol Plaatje University, said Nzimande, is a major milestone in the transformation of tertiary education in South Africa.

Anglo American, together with its business units De Beers and Kumba Iron Ore, contributed a total of R96 million to the university. The Sishen Iron Ore Community Development Trust is also establishing a R20 million bursary scheme for students. Said Barend Petersen, De Beers Consolidated Mines chairman: “The mining industry has an indispensable role to play in supporting the development of the skills that society needs and education is the leading and integral part of Anglo American’s corporate social development strategy.”

WINNING THE FIGHT AGAINST HIV/AIDS

Anglo American’s New Vaal colliery in Vereeniging, Gauteng, is winning the hard battle against HIV/AIDS. The mine has achieved UNAIDS’ three zeros. This means zero AIDS-related deaths, zero discrimination and, more recently, zero new infections among its 1,172-strong workforce.

A back-to-basics approach was adopted to educate people. “Community work and interaction with employees led to the realisation that there was still a depressing degree of ignorance around HIV and how it is spread… For us, it is all about knowledge,

knowledge and more knowledge. We tell people that they can do whatever they want, as long as they make their decisions armed with information,” says New Vaal’s wellness co-ordinator, Sharon Montoeli.

“We are very strategic in the way we send educators into the community. Assigning a young person to talk to an older crowd about safe sex wouldn’t work, so we send a more mature educator to open the door for us. The same applies to teenagers, who are addressed by the youngest members of our group, and church groups by a pastor on our team,” she says.

R14 bncontribution to the national fiscus through direct and indirect taxes paid in 2012

More than

R15 bnInvested in capex in South Africa in 2012

Export revenues generated by Anglo American in 2012

R94.2 bn

ANGLO AMERICAN: A MAJOR CONTRIBUTOR TO SOUTH AFRICA’S ECONOMY

Minister of Higher Education

and Training Blade Nzimande.

FEATURE

JANUARY 2014 I 07

In 2013, Kumba took home four Gold Quills, the industry’s communication “Oscars”. Anglo American’s Kumba business was awarded four prestigious Gold Quills for its

communication efforts by the International Association for Business Communicators at its 2013 World Conference in New York City.

It was a glamorous affair with over 700 guests, held in the ballroom of the Hilton New York Hotel in Midtown, Manhattan on 23 June 2013.

“To win one Gold Quill is an achievement; to win four is truly exceptional. This demonstrates that Kumba’s communication efforts are up there with the best. We are very proud of the team,” said Gert Schoeman, Kumba’s corporate communication manager, who accompanied the communications team to New York. Only 179 Gold Quills were awarded out of 800 entries and 2013 was Africa’s chance to shine, as the continent snapped up six Gold Quill Awards of Excellence.

Skaters competed at the state-of-the-art Kumba Skate Plaza for the Kimberley Diamond Cup, where a grand prize of R900,000 was up for grabs.

The Kimberley Diamond Cup, a well-known skateboarding event of both local and international talent, was held from 27–29 September 2013, the third year that it was sponsored by Kumba Iron Ore in partnership with the Northern Cape Department of Economic Development and Tourism.

“The Kimberley Diamond Cup is aligned to our objective of being a developmental partner of choice in South Africa,” said Norman Mbazima, CEO of Kumba Iron Ore. “The purpose of our investment is to support the Northern Cape government in establishing the province as a prime extreme sport destination. Further, the sponsorship of the Kimberley Diamond Cup is part of our outreach to the Northern Cape community and connecting with the youth by promoting safer and healthier lifestyle choices.”

Above, from left: Sishen’s communication manager Tanya Aucamp; Kolomela’s executive assistant to the GM

Nelmarie Schutte; external communication specialist Mooketsi Mocumi; community practitioner Matilo Keaobaka;

CEO Norman Mbazima; internal communication specialist Ghrethna Kruger; public affairs manager George Benjamin;

consultant Carla Pattison; and corporate communication manager Gert Schoeman.

QUILLS IN OUR CAP

CONNECTING WITH THE COMMUNITY

You can find Anglo American on Facebook, Twitter, YouTube, SlideShare and Flickr.

Website: www.angloamerican.co.zaFacebook: angloamericanzaTwitter: @angloamericanzaFlickr: angloamericanSlideshare: angloamericanLinkedIn: Anglo American

The Corporate Communications team will manage all social media. Only authorised spokespeople are allowed to post on behalf of the Group. For information or queries, email: socialmedia@angloamerican.com

For the third consecutive year, Anglo American’s Platinum business was judged one of the Top Five Gender Empowered Companies in the Resources Sector by Top Women in Business and Government 2013. At the end of March last year, Platinum’s female employees numbered 6,418, of whom 3,946 are in the core disciplines of mining, engineering, projects and metallurgy.

In terms of female empowerment, it’s well on its way to meeting the goals of the Mining Charter and the Employment Equity Act, No 55 of 1998.

GettiNG SoCiAl

WomeN At the toP

TOTA

L W

OM

EN

= 1

5%

WO

ME

N IN

MA

NA

GE

ME

NT

= 25

%

08 I JANUARY 2014

This year will mark a decade since the original Mining Charter was introduced. Companies across one of South

Africa’s cornerstone industries will be measured against the transformation targets the Charter set out back in 2004 and its subsequent revision in 2010.

“The Charter has been the driving force behind the realisation that mining companies cannot detach themselves from the realities of the communities that they operate in,” says Anglo American head of transformation and regulatory affairs, Lindiwe Zikhali.

She believes that many companies have acknowledged that transformation remains critical in an industry plagued by socio-economic instability and which inherited legacy issues of social exclusion and discrimination. But there have been varying levels of success in implementing the transformation agenda on the ground.

“There’s no doubt that transformation is a challenging process,” adds Lindiwe. “It is about more than reaching targets and requires people to change what they are familiar with: their work environments, the way they do things, their attitudes and behaviours. I think there is still some way to go.”

The original Mining Charter measured a company’s transformation progress against eight pillars: human resources development; employment equity; ownership; beneficiation; procurement; housing and living conditions; migrant labour; and mine community development.

“The Charter set out to redress historical and social inequalities and encourage transformation at all tiers – from ownership to employment equity, procurement and rural development,” says Lindiwe.

But from 2009–2010, the Department of Mineral Resources (DMR) conducted an assessment of the industry

and found that the mining industry had fallen short of the initial targets. The DMR then revised the targets, keeping the target of 26% Historically Disadvantaged South Africans (HDSA) ownership of South Africa’s mining assets by 2014 as before, but adding that HDSA at each level of management should constitute 40% of the total and linked the target to demographics.

Lindiwe asserts that Anglo American was able to get a head start in the transformation process, as it began its transformation journey before the Mining Charter came into force. But she emphasises that Anglo American’s approach is more than just meeting the numbers: “Scorecards can be self-defeating in that you end up getting what you measure. We seek to approach the transformation challenge less as tick-box compliance with regulations and more as an essential initiative as corporate citizens of this country. We’ve regarded transformation from the outset as something that is basically the right thing to do.”

She points to the changing gender roles in the mining industry as an example of how difficult it can be to achieve meaningful transformation.

“We have women working underground in roles that historically they would never have had access to, but subliminal discrimination still exists,” explains Lindiwe. “So while we may see the number of women increasing each year, we don’t really measure or check whether the same women are staying in the same positions year-on-year. Any lack of continuity may indicate the pressures that transformation can have on individuals.”

Lindiwe says companies need to constantly interrogate whether what they are doing is in the best interests of the people affected, taking cognisance of their diverse social

Transforming The fuTure of miningIn 2014, the timeframes set out to achieve the transformation targets of the original Mining Charter draw to a close. Now is the time for the mining industry to take stock.

SPECIAL FEATURE: TRANSFORMATION

JANUARY 2014 I 09

circumstances, needs and aspirations. She believes that, going forward, the impact of transformation projects needs to be measured differently.

“It’s one thing measuring how much companies spend on Social and Labour Plan initiatives, but quite another ensuring if and how they actually benefit people on the ground. It’s the difference between providing a community with a school building, and working with the community to build a school where learning and teaching can take place.”

Within the context of transformation, providing infrastructure for communities is something Anglo American can do as a company, but ensuring that it can actually deliver value to those communities requires consultation with all the associated stakeholders – from municipal authorities to community members – to ensure that the company jointly delivers facilities that have sufficient capacity, are properly resourced, efficiently managed and well maintained into the future.

The same principle can be applied to transforming ownership. Employee Share Ownership Plans (ESOPs) can be an effective tool in redistributing wealth. A leading example is at Anglo American’s Kumba Iron Ore where a combination of favourable conditions, including a strong financial performance, enabled the business to distribute among its employees – through the Envision employee share ownership scheme – the largest collective social dividend ever paid out by a company to HDSA.

The initial cash payment in December 2011, at the conclusion of the first phase, saw each permanent employee who had been with the company since inception, below management level, receive R576,045. This was a life-changing event for many employees, who used the money to pay off their debts, buy property, provide for their children’s education and, in many cases, buy a car for the first time.

The scheme continues to pay healthy dividends to employees. Since March 2012, employees have received a total

SPECIAL FEATURE: TRANSFORMATION

10 I JANUARY 2014

01 02

03 04

SPECIAL FEATURE: TRANSFORMATION

JANUARY 2014 I 11

dividend payment of R41,508. For the first six months of 2013, Envision received a dividend of R271 million, of which R95 million was paid out to almost 6,600 employees, who each received R14,649 before tax at the end of August 2013.

She also emphasises Anglo American’s enterprise development initiative, Zimele, which is now seen as a global best-practice model for companies seeking to integrate local small and medium enterprises into their supply chains. The model hinges on enhancing capability and opportunities by linking ED programmes to Anglo American’s core business. About a third of the businesses currently funded and supported by Zimele are directly linked to the company’s supply chain.

“It is through these types of initiatives that we have seen a real positive impact in terms of the Charter’s aims and objectives,” says Lindiwe.

Collaborative effortLindiwe believes that the industry needs to work together with other stakeholders, including government, communities, workers and investors, if innovative and sustainable solutions are to be found.

She adds that one of the weaknesses of the Charter is that rather than encourage mining houses to work together, it creates a competitive space where mining houses are judged per operation and per licence. This discourages companies from engaging municipalities and working together with other, sometimes neighbouring, mines to pool their resources for bigger-impact projects.

Examples that are making a difference in thousands of people’s lives include a partnership between Anglo American’s Platinum business with government on the Lebolelo Water Scheme, and Flag-Boshielo and De Hoop dams in Limpopo. The development of a R26 million community health centre – a partnership between Anglo American’s Thermal Coal New Denmark colliery, the Lekwa Municipality and the Mpumalanga Department of Health – will significantly improve the quality of healthcare for around 2,400 community members.

“In future iterations of the Charter, we hope that there will be room to encourage a more collaborative approach to transformation – across mining houses, operations and geographic regions,” notes Lindiwe.

As Anglo American chief executive Mark Cutifani pointed out recently, the South African economy may have diversified significantly over the past two decades, but the mining industry has remained its backbone. Recent research produced by the Chamber of Mines indicates that the industry employs some 525,000 people, with another 841,000 people employed indirectly in supplying goods and services to the mining sector.

Based on the assumption that each person employed in

01 Kgololosego Leteketwa,

an educator at Kloof View

Primary School in Rustenburg.

02 Geologist Elsie Phelane

and drilling assistant Thabo

Mdluli check core samples.

03 Platinum’s Seraleng

Housing Project in

Rustenburg, where

1,000 employee houses

were completed.

04 Sister Julia Ledwaba (on

the right) discusses HIV and

family planning with members

of the local community at

Ga-Madiba Clinic, Ga-Madiba

Village, Mogalakwena.

“We are fortunate to have a leadership team that buys into not only the letter of the Charter, but also its spirit. This should permeate every part of the business, beyond the transformation department and senior leadership.” Lindiwe ZikhaLi, head of transformation and reguLatory affairs at angLo american

the mining industry supports on average another nine people, close to a quarter of our population depends on the mining industry in one way or another.

“We need to leverage this leadership position to create sustainable solutions to ensure the country’s economic transformation,” says Lindiwe.

Moving forwardFollowing the 2009–2010 assessment of the industry’s progress against the Mining Charter, the DMR has initiated a detailed audit of the Revised Mining Charter by Moloto Solutions.

There remain a number of uncertainties ahead, including what shape and form the Charter will take. “It is necessary to still have a blueprint or guiding framework which can be used to incentivise companies to continue to transform, but in terms of what that will look like, it is not yet clear,” says Lindiwe.

While industry collaboration and the sharing of best practice can be used to drive improvement among peers, Lindiwe says it’s vital that mining houses look internally too.

“While the Charter does provide an external impetus, ultimately, it’s how each company grapples with transformation and translates those aims into its own culture and business that will ensure sustainable equity.

“At Anglo American, we are fortunate to have a leadership team that buys into not only the letter of the Charter, but also its spirit. This should permeate every part of the business, beyond the transformation department and senior leadership.”

Looking ahead, Lindiwe says the next decade calls for the industry, government and all stakeholders to work together, with a common purpose and a shared commitment, for the benefit of the country and its citizens.

“To make transformation a reality, we need to pull together in a joint effort. At Anglo American we are excited about what the future holds as it represents an opportunity to continue to work towards what the Mining Charter set out to achieve: an industry that proudly reflects the promise of a transformed South Africa.”

12 I JANUARY 2014

When Anglo American leaders gathered alongside other prominent players in the South African mining sector for the second Mining Lekgotla in Sandton, Johannesburg from 27–29 August 2013, it was a show of strength and resolve, coupled with a message of competitiveness and transformation, which rang out.

LEKGOTLA DRIVES HOME COLLABORATIVE MESSAGE

Last year’s Mining Lekgotla, which took place just a year after the events at Marikana, was clearly focused on re-establishing

South Africa’s mining sector in the wake of the global economic crisis as a main player on the world stage. Hosted by the Chamber of Mines of South Africa, in partnership with the Department of Mineral Resources and the National Union of Mineworkers, the gathering was attuned to the importance of genuine transformation and partnerships under the broad theme of Growth and TransformationTowards Global Competitiveness.

The Lekgotla provided a strategic platform for Anglo American to showcase its contribution and commitment to South Africa and the mining industry. As Anglo American’s chief executive Mark

Cutifani said in his welcoming address: “I cannot say it enough – we need stability to prosper, and if we prosper, so does the country. So let’s create a partnership.”

Mark called for all stakeholders to rally behind Deputy President Kgalema Motlanthe’s vision for the sector – as contained in the Framework Agreement for a Sustainable Mining Industry. “We must become a country that encourages investment and business making profits, understanding that with prosperity comes jobs and investment – in the future that will help build our country … I have no doubt that South Africa can be a leader in Africa and the world. The only questions I have are – do we have the courage to make the tough choices to take us there and do we have the love for the

ABOVE, FROM LEFT: Mining Lekgotla 2013:

Anglo American chief executive Mark Cutifani.

CEO of Kumba Iron Ore Ltd Norman Mbazima,

CEO of Anglo American Platinum Chris Griffiths

and CEO of Anglo American Thermal Coal Godfrey

Gomwe. Deputy President Kgalema Motlanthe.

RIGHT, FROM LEFT: Anglo Gold’s Srinivasan

Venkatakrishnan, Deputy President Kgalema

Motlanthe, the National Union of Mineworkers’

Senzeni Zokwana, executive director of

Anglo American in South Africa Khanyile

Kweyama and Mark Cutifani.

JANUARY 2014 I 13

REAL MINING

country that will allow us to put our personal interests aside to help build a country for all?”

Delivering the opening address, Motlanthe stressed the importance of the mining sector to South Africa and the significance of collaborative events such as the Mining Lekgotla to unite all key players behind a common goal and shared vision. “All role players in the mining sector must engage meaningfully to build relationships based on trust and mutual symbiosis necessary to bringing stability to the sector and advancing the South African economy. Each partner brings unique insights, understandings and inputs to the table, which augurs well for finding practical and sustainable solutions to the challenges the sector experiences.”

There was an overwhelming feeling among delegates that the mining industry, both in South Africa and around the world, was on the verge of great change with significant shifts including the rise of emerging markets, China, intense urbanisation and globalisation. South Africa will have an important role to play in this new environment, but it is up to all stakeholders to come together to make it work. In the words of internationally-renowned futurist and business strategist Peter Schwartz: “A balance needs to be struck to achieve the needs of all stakeholders. There can be no losers. There must be all winners.”

Critically, South Africa must look at the issue of investor confidence as a way to boost industry growth; and a rise in investor confidence can only come from a more stable and unified industry. As Finance Minister Pravin Gordhan noted: “Many would say South Africa is well endowed with natural resources. But the real challenge is what do you do with them? How do we ensure we become a competitive environment for everyone involved – that is government, business and labour? What are we going to do to attract and retain investment in the mining sector?”

A focus on small- and medium-sized enterprises (SMEs) was also critical, said Dr Lia Vangelatos, acting managing director of Zimele, Anglo American’s enterprise development initiative. “This massive global revolution is equally relevant in the South African context, where the capacity of SMEs to effect positive change is even more discernible,” she said.

As mining companies we are in a unique position to make that change felt in the communities neighbouring our operations, said Dr Vangelatos. “By working in partnership, we can help to broaden the depth, scope and reach of enterprise development, which will subsequently encourage long-term job creation, local economic development and deliver on local procurement and supplier development – imperatives that we all should embrace.”

Finally, Godfrey Oliphant, Deputy Minister of Mineral Resources, called on the industry’s leaders to take up the challenge. “One area we have to get right is taking decisions and actually implementing them. But implementation needs commitment from leaders. I have no doubt that we have the best leaders, but they must rise to the sophistication of today’s mining industry,” he said.

SA MINING IN NUMBERS 2012

of BEE dEals concludEd in thE sa mining sEctor

invEstmEnt in downstrEam Economic activity

spEnt on community invEstmEntof total corporatE tax paid

paid in corporatE taxEs in 2012 alonE

joBs crEatEdof gdp contriButEd

invEstEd in skills dEvElopmEnt

R150 BILLION

R300 BILLION

R1.4 BILLION17.2%

R20 BILLION

1.3 MILLION19%

R4 BILLION

“I cannot say it enough – we need stability to prosper. And if we prosper, so does the country. So let’s create a partnership.” – Anglo AmericAn ceo mArk cutifAni

14 I JANUARY 2014

REAL MINING

MINING FOR THE FUTURE

02 03 04

JANUARY 2014 I 15

When Mark Cutifani took up the role of chief executive of Anglo American,

he made it clear that he wanted to see a renewed focus on technical innovation; the application of intellectual capital to drive the creation of longer-term competitive advantage across the Group.

FutureSmart, in development for over four years, is one initiative that addresses this vision. It will facilitate the delivery of greater value from our broader mining activities by developing new technologies for the future and effectively implementing existing ones to deliver desired outcomes. To these ends, FutureSmart brings together approximately 50 different innovation and technology projects already in progress. These are grouped into 11 programmes that cover the entire value chain from exploration to geosciences; processes; engineering; logistics; and optimising our products and assets.

The initiative builds on Anglo American’s rich heritage in developing mining technology. For example, we were at the forefront of deep-level hard-rock mining and we have led the industry in platinum, gold and diamond processing – as well as in marine mining for diamonds – to name just a few.

Through the technologies that are currently being developed, we have the opportunity to significantly change the working environment for the better – not just for ourselves, but for our industry as a whole. While our primary aim is to give Anglo American a competitive advantage, we also aim to provide industry-wide solutions to challenges common to all in the sector. This means taking an open and collaborative approach where practicable and in line with our business values. Alongside the Group strategy, therefore, we are partnering with our peers, research

institutions and suppliers to find solutions and agree on industry standards.

Globally, the mining industry faces the challenge of becoming more sustainable. Using innovation and technology to find safer, more efficient, environmentally friendly and sustainable ways to unlock mineral value meets this challenge.

An example of FutureSmart ‘in action’ is our integrated automation and electrification system at the Grosvenor coal mine. This industry-leading innovation will integrate and control all processes and power systems, potentially enabling a remote-operations capability and helping to reduce the risks faced by our employees underground.

Other technologies that have recently been implemented include low-temperature Superconducting Quantum Interference Devices (which are used in exploration and are essentially very sensitive detectors of magnetic fields); centralised monitoring of large-haul trucks; 3D scanning; flexible conveyors at Thermal Coal; fine milling in Platinum; and on-line road quality monitoring in open pits.

Additional technologies are being tested and researched.

Through the technologies that are currently being developed, we have the opportunity to significantly change the working environment for the better – not just for ourselves, but for our industry as a whole.

Dave Bentley, Group head of technology development, explains why FutureSmart, the Group’s mining innovation programme, will potentially make Anglo American a leading global mining company and help the mining industry to become truly sustainable.

01, 02 & 03 A profiler (which

monitors a range of mining

conditions) underground at

Bathopele, testing the various

on-board technologies.

04 In the workshop at Bathopele.

01

REAL MINING

Made up of ultra-fine aerosols, which are easily inhaled and deposited in the

lungs of people exposed to the fumes, DPM is known to cause cancer, irritation of the eyes and the respiratory tract, exacerbate asthma, and induce cardiovascular and cardiopulmonary health disorders.

“The health impacts of diesel exhaust fumes have become a much bigger focus in the mining industry, given that much of the equipment used is diesel-dependent,” says Anglo American’s Claudina Nogueira, health and safety advisor, Technical Solutions.

“Exposure is of greater concern in underground mining operations, as well as surface semi-enclosed areas such as loading bays and workshops, where the build-up of fumes is more severe due to limited artificial ventilation.”

The particulates have been classified as a Group 1 carcinogen – the highest level of carcinogenic (cancer-causing) risk – by the International Agency for Research on Cancer (IARC), and this has led to renewed global awareness and a pressing need for improved risk management and pre-emptive action around exposure to diesel fumes.

“Currently, DPM exposure limits are legislated in Australia, Canada, the UK and the USA,” explains Claudina. “No limits are presently legislated for several countries where Anglo American operates, including South Africa and South American countries, but there is a high probability that regulatory requirements will be reviewed in these countries.”

As a leading mining company, Anglo American aims to match lower levels of exposure through the implementation of a multi-disciplinary programme across its global operations and maintain these at the lowest levels reasonably achievable.

“We believe that we need to have a mind-set that goes beyond compliance with regard to our health initiatives,” says Claudina. “Ideally, you want to look at implementing effective engineering interventions to control the emissions at source and go beyond the legal requirements.”

In order to establish an appropriate course of action within the Anglo American Group, a three-phase approach to instituting diesel exhaust emission indicators was proposed for roll out across the organisation.

DPM levels are dependent on the fuel quality (low sulphur is best) and on engine type, as well as

the effectiveness of the exhaust filtration systems used across the mining operations.

“We’ll not only be looking at the availability of low emission diesel fuel, the number of diesel-powered vehicles in our fleets and what control measures are currently in place, but also at the number of people potentially exposed in the various areas of the operations,” adds Claudina.

Diesel engines power many types of vehicles and equipment used in the mining industry. During the combustion of diesel, they produce diesel exhaust fumes, which are a mixture of gases and particulates. In countries where low emission diesel is available, significantly lower levels of DPM emissions have been achieved through the use of more efficient engines, combined with low-maintenance filters. These lower levels have become the benchmark for the rest of the Group’s operations.

In support of Anglo American’s global health objectives for 2014, the programme strives for zero harm and to mitigate serious health risks. “In terms of health and technical outcomes, our collaborative efforts should lead to cleaner air and fuel savings, as well as improving health in the workplace and the communities in which we operate,” says Claudina.

The programme will also contribute to reductions in the costs and impacts to the company brought about by DPM exposure.

DIESEL EXHAUST FUMES:

A collaborative team made up of technical experts across Anglo American is investigating ways to reduce levels of exposure to Diesel Particulate Matter (DPM), caused by diesel exhaust fumes.

John Lee Jemmerson, a

diesel mechanic at the

New Vaal workshop, follows

procedures for preparing

trucks for service.

REDUCING EXPOSURE

16 I JANUARY 2014

FEATURE

JANUARY 2014 I 17

After three years of research and development by the regional engineering services of Anglo American’s Thermal

Coal business unit and Anglo American’s Technical Solutions: Field Services, a new multi-sensor underground environmental monitoring system is ready to be implemented at Zibulo colliery.

“Although environmental monitoring systems have been in place to detect smoke and monitor methane levels, carbon monoxide gases, temperature, barometric pressure and air velocity for the past 20 years, this multi-sensor solution brings with it several significant advances,” says Group technologist Raymond Wright. “This kind of technology is especially vital in the coal industry where methane gas released during mining can have disastrous consequences.”

The solution includes a high-speed digital communication system and built-in intelligence capable of transmitting an alarm without the need for processing on the surface computer. At the same time, there is an audio-visual alarm indication on the sensor to notify people working underground.

“Through alarms, it alerts employees to incidents as or before they happen and gives the surface control room real-time access to data and warnings of any abnormalities,” says Raymond.

Unlike previous systems, its sensors are able to detect multiple hazards, as opposed to a single source – for instance methane, air velocity and smoke. The sensors also have a built-in watchdog functionality to confirm that they are in working order at all times.

Local company Adroit Technologies, which specialises in the development of real-time software for the industrial automation

market, provided its latest portal suite to deliver data to the control room through a single point of configuration. It promotes continuous improvement via online analytics and follows trends to provide a greater understanding of conditions leading up to a potential incident.

“While the system relies on less human intervention through automatically generated reports, emails and text messaging to escalate alarms, Zibulo personnel have received intensive training to enable them to use it to increase vigilance and achieve zero harm,” adds Raymond.

The solution was tested at Zibulo until the end of 2013, ahead of recommendations to adopt it as a standard across the Group.

UNDERGROUND SAFETY An environmental monitoring system on trial at Zibulo colliery enables ventilation monitoring in real time.

02

01

01 Zibulo colliery.

02 Testing of the colliery’s

advanced underground

environmental

monitoring system.

18 I JANUARY 2014

PLATINUM CreATINg STreNgTH AND SUSTAINABILITYRestructuring is never easy for an organisation and Anglo American’s Platinum business chartered new territory during 2013 by working with government and labour organisations to minimise job losses. It is also creating a more sustainable, competitive and profitable platinum business for the long term, to benefit all stakeholders.

01

JANUARY 2014 I 19

REAL MINING

The company first announced its restructuring plans in January 2013, which would have affected up to 14,000 jobs, of which 13,000 would have been in the

Rustenburg area. “It was always envisaged that the ultimate numbers of employees to be

retrenched, after taking into account mitigation plans, would be significantly lower,” says CEO of Platinum, Chris Griffith. “Together with our unions and the regulator, we worked diligently to find ways to minimise the impact of our proposals on the impacted employees.”

Following the announcement of that original proposal, Platinum, the Department of Mineral Resources (DMR) and recognised unions agreed to suspend the retrenchment process to allow for a thorough process of engagement.

The extensive engagement process between the DMR, Platinum and organised labour led to a revision of the original proposal, enabling the company to still achieve its efficiency objectives, while significantly reducing the number of mining and processing jobs affected to approximately 6,000, in addition to 900 corporate and overhead employees. This was followed by an extensive consultation process that was facilitated by the Commission for Conciliation, Mediation and Arbitration in line with the Labour Relations Act.

“We managed to identify a number of ways to avoid and minimise job losses,” explains Chris. “These included redeploying affected employees into vacancies across the Group, voluntary severance packages and early retirement.” This further reduced the number of employees who would ultimately be retrenched to approximately 3,300.

The Association of Mineworkers and Construction Union (AMCU) brought a legal strike action, which commenced on Friday, 27 September 2013 in Rustenburg and the North of the Pilanesberg operations in opposition to the retrenchment notices issued by the company. The strike ended after 11 days and cost the company 44,000 platinum ounces.

As part of the strike settlement, the 3,300 impacted employees who had previously not taken up the offer of redeployment, voluntary separation or early retirement, and were to be retrenched, were granted voluntary separation packages.

In addition, about 1,250 of those 3,300 employees are being retained for a period of six months to undertake reclamation activities at the affected mining operations: Khuseleka 2 and Khomanani 1 & 2.

“During this period, these employees will be offered job opportunities that may become available as a result of ending the use of contract labour or through natural attrition,” says Chris. “At the end of the six-month period, employees not placed in vacant positions will be offered voluntary separation packages.”

In addition, a further 328 job opportunities, which were occupied by contractors, will be reserved for permanent employees on termination of their existing contracts.

“With this latest agreement, no retrenchments will be necessary after the redeployments and voluntary separation packages.

“We worked diligently with all our stakeholders to reach a shared objective of creating a competitive platinum business,” says Chris.

The company’s review of the business was in response to its revised expectations for platinum demand growth and a number of structural challenges that have eroded profitability in recent years.

These challenges still remain and it is imperative that the portfolio review recommendations be implemented as a matter of urgency to bring in efficiencies and improved productivity, and most importantly, to build a business that is profitable through the years.

The amended proposals also include revising production targets; consolidating three operating mines in the Rustenburg area; and reducing overhead costs.

02

03

01 A 5kg, 99.99% pure platinum ingot in the forge area of the Precious Metals Refinery

in Rustenburg.

02 Slag tapping at the Polokwane smelter.

03 Process controller Johannes Magongoa in the forge area of the Precious Metals

Refinery in Rustenburg. Johannes is placing cooled platinum ingots onto a trolley

to be taken to the roller press.

FACTS, STATS & NEWS

20 I JANUARY 2014

The construction phase of the new underground mine, which is to be built beneath the operating open-pit Venetia mine in Limpopo, was launched in late October 2013. This showcases another significant investment in South Africa’s mining sector by De Beers and Anglo American.

The R20 billion investment will extend the life of the mine beyond 2040, with the first diamonds from underground expected to

begin in 2021. During its lifetime, the mine is projected to treat some 130 million tonnes of ore which contain an estimated 96 million carats of diamonds. The mine will also support more than 8,000 jobs directly and a further 5,000 through the supply chain.

The ground-breaking ceremony was attended by dignitaries such as South African President Jacob Zuma – who turned the first earth; Minister of Mineral Resources Susan Shabangu; Anglo American plc chairman Sir John Parker; chief executive of Anglo American and chairman of De Beers Mark Cutifani; Philippe Mellier‚ CEO of De Beers; Barend Petersen‚ chairman of De Beers

The process plant from the

northern side of the Venetia

property, taken at dusk.

DE BEERS’ R20 BILLION VENETIA VOTE OF CONFIDENCE

JANUARY 2014 I 21

REAL MINING

Consolidated Mines; Manne Dipico‚ chairman of Ponahalo Holdings, the De Beers Consolidated Mines’ empowerment shareholder; and Phillip Barton‚ CEO of De Beers Consolidated Mines.

President Zuma was upbeat about the investment, saying: “This R20 billion investment in the diamond industry‚ the biggest single investment in the diamond industry in decades‚ signals that indeed our mining sector is poised for growth‚ and that it has a bright future.”

Mark was equally buoyant in his assessment of the mine’s future and, more critically, that of the South African mining sector. “For 125 years, De Beers has been a part of South African mining and business. Throughout that period, it has consistently developed long-standing partnerships in the diamond industry in South Africa. The journey of mineral discovery, investment, marketing and the consequences of industrialisation have brought us all together with a common interest in this great industry – whether we’re in government, mining companies, investors, union representatives, communities associated with the mines, or service and product suppliers.”

Turning specifically to the importance of the mining industry, Mark said: “Mining deserves a better reputation; globally it takes up less than 1% of the Earth’s surface, while driving, directly and indirectly, around 45% of the world’s economy. Across the globe, mining is the most important activity, after agriculture. Without mining, we would not be able to feed 50% of the world’s population, our carbon gas would be uncontrollable and we would not have sufficient fresh water to supply the world’s population. Mining touches everyone’s lives, resulting in products that make the world work.”

In 2012, almost one-fifth of South Africa’s economy was attributable back to the mining sector, said Mark. “In that same year, the mining sector, with related services, employed around 1.3 million people (14% of total employment) in South Africa, creating over 500,000 jobs directly and another over 800, 000 jobs indirectly. The social multiplier of mining is very significant for South Africa. Given a dependency ratio of about 10:1, this means that more than 13 million people depended on the jobs created by the mining sector for their daily bread.”

Turning to the Venetia mine and its relevance in Limpopo – South Africa’s second-largest mining province, where mining gross domestic product (GDP) was R52.2 billion in 2012 and mining accounted for 27.2% of the provincial GDP – Mark noted that the mine “already touches the lives of the many communities who live in this region and province of Limpopo”.

Situated close to the border of Botswana and Zimbabwe, the Venetia mine was opened in 1992 and, as an open-pit operation, produces about three million carats a year. It is South Africa’s leading producer of diamonds.

The sustainability and longevity of the mine and its positive impacts on the surrounding community remain at the forefront of these latest developments, which are set to sustain and underpin South Africa’s diamond industry, as well as the related industries of South Africa and other countries, including India, South Africa’s partner in the BRICS bloc with the world’s largest diamond-cutting centre in Mumbai.

Enterprise development – through the De Beers Zimele initiative –

has a key role to play in nurturing commercially viable businesses in the broader community, while bringing about black economic empowerment through the creation of small and medium enterprises. In 2012, De Beers Zimele’s Venetia Business Hub provided R3.4 million in funding to 17 small businesses. As a result, a total of 207 jobs were created and/or sustained. Funding was provided to entrepreneurs, which ranged from loans of R1,000 to R1 million, at a 6% per annum interest rate.

Furthermore, said Mark, the mine remained fully committed to laying “the foundations for communities to develop and prosper, especially in rural and remote areas, where they would otherwise have few opportunities. Venetia mine joins in that mission. It has already created more than 2,500 permanent jobs and, indirectly, the mine benefits thousands more people in the community, in Limpopo province and in the rest of the country. Local procurement, training and upskilling are central to our thinking for Venetia – both in the construction phase and also in the many decades after the mine converts into an underground operation.”

Effective and sustainable skills development remained at the heart of Venetia’s operations, he said. This already included partnering with the Department of Education to provide “infrastructure to 11 schools in the Musina and Blouberg areas, including classrooms, ablution facilities, administration blocks and water provision”; providing scholarships to the needy; introducing a teacher subsidy programme to three local schools in the Musina area to provide funding for additional maths and science educators and, “through the Rural Schools Programme, De Beers Venetia Mine, again in partnership with the Department of Education, built boarding facilities for children with special needs at Ratanang Special School in Senwabarwana, Limpopo. This boarding school houses more than 300 children and has matron’s quarters, dormitories and a security guard house.”

Venetia mine, and its adjacent Venetia Limpopo conservation area, is also a leading example of excellent environmental practice and ecological stewardship. The 2,200ha mining area is partially affected by mining operations and tailings dumps and associated infrastructure such as roads, offices and workshops. This area, though, is less than 7% of the 32,100ha owned by De Beers; therefore the ecology division of De Beers Consolidated Mines helps conserve the remaining 93%.

Finally, Mark was quick to stress the role De Beers embraces as “an international ambassador for South Africa”. He said: “For Anglo American, De Beers is a business with which we have a long and shared history and one we are very proud of. The reason we are all here today, to formally begin the works on Venetia’s next phase of life, is testament to South Africa and clearly demonstrates our commitment to the country, to diamonds, to Limpopo and to the many people who will benefit from Venetia mine.”

As Philippe concluded: “[There can be no] greater vote of confidence by our shareholders in South Africa and De Beers than the decision to build an underground mine of the future here at Venetia‚ one of a handful of world-class diamond mines.”

FACTS, STATS & NEWS

22 I JANUARY 2014

LEADING BY EXAMPLE

Norman Mbazima, chief executive officer of Kumba Iron Ore Ltd, has over three decades’ experience in the mining industry. He talks about his long-term outlook for iron ore, growth strategy and leadership style, while revealing his top three passions.

What are you focusing your energies on over the next year? The first things we need to tackle are production and safety at Sishen mine, where the bulk of Kumba’s iron ore production comes from. It’s been challenging because of the constrained mining conditions there. We must ensure that in 2014, things come back into balance. We’ve done all the studies at Sishen and we’ve got all the right people in place: we just need to deliver, both on production and safety at the mine. That will be my top priority.

What about the other mines? We expect to have to expand Thabazimbi mine and extend its life. At Kolomela, which has been doing very well, our focus is also on expansion. How big it can get, how quickly it will grow and at what cost are questions we need to ask ourselves.What is your long-term outlook for iron ore? Iron ore will remain a great business, providing good margins and very good value for our stakeholders – our shareholders, employees,

JANUARY 2014 I 23

REAL PEOPLE

communities and governments. However, the price of iron ore is expected to decrease in the medium term as significantly increased supplies come into the country, especially from Australia. Every analyst would agree with this, but the producers at the bottom half of the cost curve should continue providing value to their shareholders.Do you see overseas suppliers as a threat to the South African market? The iron ore market is a global one and Australia and Brazil will increase the amounts they supply to it, but we don’t regard this as a threat. We don’t anticipate ever having a problem selling our product. It’s really just a question of price.What are the main pillars of Kumba’s growth strategy? The first one is maintaining our growth in South Africa. We currently have three pits at Kolomela, which we expect to double to six in the future. We are currently doing the research and all other necessary preparations to that end. The second pillar in the growth strategy is proving low-grade technology so that we can convert low-grade resources, most of which have already been mined, into saleable product. That process is going very well at present, though the technology still needs to be proven before we invest in building plants, etc. We’re hoping to produce significantly greater quantities of product, both from Thabazimbi and Sishen, and in time from Kolomela as well. This would make a meaningful addition to our portfolio. The third pillar of our growth strategy is for us to continue to look at opportunities beyond South Africa in the emerging iron ore regions of western and central Africa. Iron ore resources in these regions are often of high quality, but the infrastructure and logistics challenges can be considerable.Are there any new initiatives to improve safety in your operations? Thankfully, last year we did not have any fatalities at Kumba. However, the number of lost time injuries increased significantly, although they were less severe compared with previous years. Nevertheless, we would like to reduce those numbers, too, as quickly as possible. In June last year, we developed an enhanced safety improvement plan, which we have been implementing. We hope to see further benefits this year. You achieved record production in 2012. How will you maintain the momentum? The first priority is to optimise Kolomela’s production rate. We need to restore the production of our flagship mine, Sishen, to its capacity of 37 million tonnes per annum. In 2012 we produced 33 million tonnes, and our output in 2013 will probably prove to be just below that. Key focus areas for us will be new mines and developing iron ore technology. What do you think of South Africa’s role in the global mining community and as an investment destination? In recent years we’ve taken a knock in the global mining community, although South Africa’s resources still make it one of the world leaders. As an investment destination, we have not been doing very well, although I believe that as a collective, we have started to turn the industry around. By ‘collective’, I mean the private sector, government as a regulator and labour. I hope we can sustain this momentum in 2014. I was at Venetia late last year, where De Beers was announcing a R20 billion investment in an underground mine.

That is a strong indication that the regulatory framework is starting to work and means there could be more such investments in the industry. What are your career goals? I’ve had a blessed career. I’ve really enjoyed it. I’ve moved through the ranks and I did many different types of work both before and after joining Anglo American, so I’m very satisfied. I’ve really been fortunate at Anglo American. I have felt very supported and the level of integrity and professionalism has been excellent. Anglo American has allowed me to thrive because my values have been aligned with those of the company.

In September 2012, I started at Kumba and there are still quite a few issues we need to resolve – operational, growth, regulatory and legal ones. Right now I’m focused on being able to deliver on those. I would like all our shareholders to be happy with our performance, so these are my career objectives right now. What keeps you awake at night? I worry about the safety of our people. When we talk about safety being our number one priority, we really mean it: it has to be top of all of our minds. How would you describe your leadership style? I’m a people person. Whether it’s my colleagues in management, our customers, our suppliers or even our analysts, I like to deal with people on a personal level. I always ask myself: “How can I positively influence what they think about Kumba?” If I can achieve that, then everything else falls into place. But to do so, you need a strategy that everybody buys into and is striving towards. My leadership style is about consolidating these two elements.What do you do to relax? That’s an easy one! I have three passions. The first is spending time with my extended family. The second is golf. In fact, I’m playing off a 14 handicap right now. The third one is wildlife: I enjoy being outdoors, watching wildlife and studying the habits of animals and birds. Do you have any children? I have two daughters and a son, who’s the middle child. Two of them have graduated from university and one is well on the way, so – again – I’m very blessed.

“I like to deal with people on a personal level. I always ask myself: ‘How can I positively influence what they think about Kumba?’ If I can achieve that, then everything else falls into place. But to do so, you need a strategy that everybody buys into and is striving towards. My leadership style is about consolidating these two elements.”– NormaN mbazima, chief executive officer of Kumba iroN ore Ltd

FACTS, STATS & NEWS

02 I NOVEMBER 2013

JANUARY 2014 I 25

REAL PEOPLE

AN AUTHENTIC

With an array of very different stakeholders – from government, to employees, investors,

customers and the people of South Africa – mining often lies at the heart of the socio-economic debate (of our country).

In the past we’ve seen mining companies reacting to public pressure and negative publicity, trying to put out fires rather than going out there proactively to give people a different perspective. There was a realisation about four years ago at Anglo American that the company needed to tell the untold stories of mining through advertising to bring other perspectives to the debates around the industry.

Laurent Marty, strategic planning director at Joe Public advertising agency, explains that aside from the granting of mining licences, mining companies need a ‘social licence’ to operate and a strong contributor to this is reputation. “Reputation has been acknowledged as one of the major strategic assets of a company, often more valuable than bricks and mortar. This notion, however, gives rise to a particularly ambiguous idea: that image is more important than actual deeds, that reputation management should be built as an end in itself, rather than as a sign of corporate health.”

For Dr Charles J Fombrun, founder and chairman of the Reputation Institute, building a reputation is actually about cultivating a broad stakeholder ecosystem, not creating spin. “No company wins support by simply engaging in advertising and PR campaigns that do not reinforce the reality of what the company is actually doing,” he writes.

The advertising campaign is not about creating spin. It’s about cultivating relationships with different

stakeholders. The Anglo American positioning and campaigns came not from a desire to spin a few good stories, but from the willingness to face the contradictions that arise from mining with courage, authenticity and humanity.

The campaign is part of a larger global integrated advertising campaign which is being implemented in Chile, Brazil, Australia and London. In all cases the campaign is adapted to focus on local needs. As in South Africa, the aim is always to tell stories of how mining and Anglo American, in particular, are making a difference in the communities in which we operate through the eyes of our own employees and partners.

Three years on and the campaign has evolved into its next phase. TV has now become one of the main vehicles to speak to the whole of South Africa, acknowledging the national dimension of the debates at hand. The campaign has also evolved from using black and white images to using colour. “The focus is now on really looking at the positive benefits of mining,” says Laurent.

EVOLUTION When it comes to communication with its many stakeholders, Anglo American has undergone an evolution over recent years, explains head of corporate communication in South Africa, Pranill Ramchander.

COMMUNICATING DURING CHALLENGING TIMES

The Anglo American positioning and campaigns came not from a desire to spin a few good stories, but from the willingness to face the contradictions that arise from mining with courage, authenticity and humanity.

26 I JANUARY 2014

REAL PEOPLE

“As an industry leader, we are now taking the initiative to speak about the positive impact of mining, as practised by Anglo American. This is a slight shift, which aims at putting the current debates into real perspective.”

Set against the backdrop of calls for nationalisation, mass retrenchments in the mining sector and declining investor confidence, the campaign hopes to inform key debates. It sets out to explain that mining is a cornerstone of the South African economy and a major employer and calls for a balance between wealth creation, transformation and employment.

Although there may be other events and issues taking place in the mining sector, this campaign is independent, not reactionary. Says Laurent: “It’s a process of constantly explaining where the company is at.

“It’s really about saying that yes, mining is challenging. It is fraught with social, economical and political challenges, but the way a company chooses and commits not only to listen, not only to collaborate in a pragmatic manner, not only to demonstrate empathy, but, most importantly, to show positive results and real evidence of progress, is what defines it in the end.”

The way for Anglo American to navigate the reputation economy is the way of authenticity. Whether one calls it a brand or “reputation”, it must be embedded in the truth of the organisation. This is what the positioning “Real Mining. Real People. Real Difference” is all about.

The Thermal Coal business launched an integrated campaign in the communities surrounding its operations,

which consisted of outdoor, regional radio and print advertising.

JOSEPH KENTEOwner of Vukani Musa Construction

Each person has individualstrengths, and it is our dutyto encourage them.

Take Joseph Kente. Forced to leave school early, he later joined Kumba Iron Ore, a business unit of Anglo American, as a general worker. With our support, he passed matricand studied project management.

With funding from our enterprisedevelopment initiative, Zimele,Joseph started Vukani MusaConstruction in 2008. Today heemploys 107 people who build local mine houses and schools.

It is our partnerships with peoplelike Joseph that demonstratea mine can shape much morethan a landscape.

www.angloamerican.co.za

STRONGERTHAN IRON

THE HUMAN WILL:

REAL PEOPLE

28 I JANUARY 2014

Anglo American, in partnership with the Gordon Institute of Business Science (GIBS) in Johannesburg, delivers two highly customised programmes supporting employees to develop and enhance their competencies in the key areas of management and business. These programmes, called the Programme for Management Excellence (PME) and The Achiever Programme (TAP), form part of the Group’s development programmes that aim to attract and keep top talent.

TAILOR-MADE BUSINESS EDUCATION

Back Row, Left to Right: Molotsi Mofokeng, Loyiso

tyira, anthon Voigt, Makhosonke Malinga, hugo Janse van

Rensburg, Bruno Polizio, christian ihlenfeld, Joseph hwata,

Pieter van Rooyen, tiro tamenti, hein Boucher, gerdi van der

Merwe. thiRD Row: Rodney Moroke, Noncedo Pheza, Nelson

iglesias, Delani Ngcobo, chris Naidoo, warren Landman, Daniel

Bahia, Neil Rein, Niresh gungadeen, alberto castillo, federico

gonzalez, Rodgers Mundembe. SecoND Row: cristines

Lisboa, tsepaang Moyo, Lenelle thomsen, Megan cottam,

tamara Baxter, Mariette Maritz, Romana govender, James

Millar, Minkie Motsai. fRoNt Row: Yean Lii tai, tjintjane Musie,

Refiloe Veranda, Desray clark, angelique Mare, anisa Baker.

Right: a leading faculty providing insight into the business

world with a key focus on mining and anglo american.

faR Right: taP delegates in discussion after class.

JANUARY 2014 I 29

The programmes are designed to provide a platform for the development of leadership within Anglo American’s global

operations. The design foundation of the programmes is the People Development Way and they are geared to take the participants on a personal journey of self-development and performance enhancement.

Putting theory into practice through PMe For Prevlen Rambalee, a senior process engineer, one of the most useful elements of the PME course was the focus on self-management.

“It gives you a new perspective on how you think, how you manage yourself and then enables you to use this in your interactions on a daily basis in your work,” says Prevlen.

“One of the benefits was at the outset of the course, we were supported by a designated PME coach, who helped us create a personal development plan,” he adds. “On completion of the course, we were provided with an individual development report that summarised feedback from all the assessments and feedback we had received.”

The aim of the PME programme is to help participants discover and improve personal development areas within their own careers. The course allows individuals to develop their knowledge of business fundamentals in the context of their positions within the company and assists them in making decisions in line with the Anglo American strategy.

“They are given tools to build leadership skills with a focus on self-discovery and in turn more effective interaction with others, a greater understanding of business and the impact of their decisions on our business and the application of the learning back in the workplace,” says Maryanne Trollope, senior human resources manager: training and development. “Participants are encouraged to develop networks within Anglo American across various commodities, functions and countries.”

Delegates are also given the opportunity to work in groups to put theory into practice. One of the key deliverables of the PME programme is the Business Improvement Project (BIP), where syndicate groups utilise the skills learnt on the programme to deliver a project which will show a return on investment for Anglo American.

One example of such a project was completed in 2012 by a group called The E-lime-inators whose project focused on optimising acidic waste treatment at the Anglo American converting process (ACP). The project estimated a return on investment of 203% (one year) and 1073% for a 10-year period, on the assumptions that the filter would be replaced every 10 years, at capital costs of R1.5 million, in conjunction with introducing an alternative lime product/supplier as part of the two-pronged approach.

According to the group: “A large part of the team’s success was premised on the group’s ability to tap into each individual’s strengths and leverage it to the overall group’s benefit.” This resulted in this team being one of the joint winners on PME 19.

“Anglo American has a strong focus on ensuring that it has the right people in the right positions to enable it to meet its business objectives,” says Maryanne. The PME course focuses on excellence and career development; eligible employees ideally have between five and 10 years of experience and are valued contributors to the business.

taP – a personal journey TAP sets out to encourage young professionals on a journey to discover themselves and develop leadership skills within the context of Anglo American as a whole.

“The programme provides a space for discovery and an opportunity to learn more about Anglo American. In this way, our people are more adept at understanding and interpreting the world of Anglo American and reconciling this knowledge with their personal realities,” says Maryanne. “As with the PME, TAP encourages delegates to network across the company’s functions, business units and geographies.”

Delegates create an individual development workbook that allows them to record their personal growth throughout the programme and to determine their personal career management steps in the future. Another deliverable requires them to research and build a business case for an area they believe can bring efficiency to the company. Finally, the course requires participants to design and execute a sustainable initiative to add value within communities linked to Anglo American.

A good example of a community project was a team called The Knitting Experts who worked together with the Usindiso Ministries Shelter for abused and homeless women and children in Johannesburg city centre. They helped teach the 80 women and children to knit. These women and children are given residence at the shelter for periods of between three and six months. This skill enabled the women to gain some independence through earning an income when they left the haven.

The team raised R25,300 through fundraising by TAP delegates in the UK, Brazil and South Africa. This money was used to finance the skills training and supplies, as well as allowing the team to donate R5,000 to the shelter and R12,300 to the Anglo American fund that supports the shelter.

“As an action learning initiative, TAP enables delegates to grow in confidence by offering practical skills and leadership development guided by programme facilitators who represent a variety of subjects and specialities,” says Maryanne.

Like the PME programme, TAP delegates are given a number of tools which help them discover themselves in the context of Anglo American and The People Development Way during the course. This also forms the basis for their personal development plans and enables their progress to be tracked throughout the programme. This development is supported by mentorship which will hopefully continue after the programme is finished to ensure they continue on their chosen development path.

“As with PME, TAP encourages delegates to network across the company’s functions, business units and geographies.”

30 I JANUARY 2014

REAL PEOPLE

In September 2013, Stan (who is also chairman of the National Business Initiative’s Energy Efficiency Leadership

Network) was excited to see Anglo American again commended by Carbon Disclosure Project (CDP), which represents a significant portion of the investor community. Anglo American is the only mining company to be included in the CDP Global 500 Climate Performance Leadership Index. This acknowledgment speaks to the heart of what Stan and his team do across the Anglo American Group.What drives Anglo American’s approach to environmental sustainability? Certainly the licence to operate and compliance are prerequisite, but what I’m finding is that sustainability brings in efficiencies that allow you, over the long term, to obtain more value. It’s got to do with longer-term competitiveness.And investors are looking for sustainable companies? It’s about companies that are adaptive, that can innovate quickly and can leverage relationships with stakeholders and communities. Mining is unlike a plant or factory, where one manages efficiencies in a relatively ‘stable’ environment. In mining, you tend to advance out of the ‘purple patch’. So to produce the same ton, you need to use more energy and emit more carbon than the year before. Cumulatively you have a growing impact, so you can’t stand still. So you have to be ahead of the game? To be competitive, you need to show how you can be smarter than anyone else. Can you explain Anglo American’s energy and carbon strategy? There are three aspects to Anglo American’s sustainability strategy. They are:• Operational excellence – The things we do within our business

that improve our environmental performance. With regard to energy in particular, it’s about improving productivity.

• Exploiting technologies – Implementing technologies so we can do what we do with less impact on the environment and at a lower cost. An example of this is the collaboration between

Anglo American Platinum and an independent power producer to recover its waste heat energy and produce 4MW of electricity at the Platinum processing facility in Rustenburg.

• Engagements and partnerships – How we move beyond the system of the organisation and how we interface with society. Our work at the National Business Initiative’s Energy Efficiency Leadership Network is intended to improve energy efficiency management across business and government, thereby contributing to shared objectives of lowering energy intensity and establishing successful network partnerships.

Tell us about ECO2MAN. It stands for energy and CO2

management and it’s a programme I introduced to the Group in 2010. It’s the way we manage energy and carbon across the business. This takes into account some of the external drivers, like costs, and it helps us to understand how energy is being used and how it can have a positive impact.So it’s about data collection? Yes, because you need to understand energy consumption and the emissions footprint. It is costly to install meters at process and equipment level and it takes time to get it working. But that’s part of what ECO2MAN is about; understanding the correlation with major operational processes and acting on good-quality data. Have you been able to institute savings as a result? Yes. Once you have the data and you’ve analysed it, it then comes down to identifying opportunities to save. In some instances, it is as simple as shifting power demand to off-peak periods and benefiting from lower tariff rates. In total we have a listing of over 600 energy saving projects, which provides impetus for sharing of good practice across the Group. Any one initiative you wish to mention? Our Group Technology Development team is looking into energy recovery in gravity-fed slurry pipelines. The technology has the potential to benefit a number of our business units.

Making each kilowatt hour countStan Pillay, the Group’s manager for climate change and energy, is the man behind Anglo American’s ECO2MAN programme – the first phase of Anglo American’s energy and carbon dioxide management strategy.

REAL PEOPLE

Making each kilowatt hour count

Growing global demand for energy

Introduction of carbon pricing and emerging climate impacts

Energy insecurity and rapidly escalating energy costs

Reduce exposure to high costs, energy insecurity and carbon pricing

More e�cient, resilient, sustainable operations with lower environmental impact

Maximise our energy and carbon savings

Group

Business Unit (BU)

Site

Energy and CO2

Energy targets

Site/BU target con�rmed by 2015

PROJECTSAVINGS

Energy and CO2 Management is a programme that shows where and how energy is used and where energy and emissions can be saved to help achieve operational excellence.

Group Technical Standard 23: Energy and Green House Gas Emissions Management Standard. Full compliance by 2013. Targets delivered by 2015.

ECO2MAN: DELIVERING OPERATIONAL EXCELLENCE IN ENERGY AND CARBON

6

TO IMPROVE ENERGY AND CARBON PERFORMANCE IN THE WAY WE DESIGN AND OPERATE SITES

Identify savings and opportunities

Energy administration

What opportunities are there for using energy

more efficiently?

What options are there for consolidating

billing and load shifting to optimum

tariff?

What good/best practices could we adopt?

3Allocate roles and resources1

45

Understand energy use and carbon emissions

Signi�cant users De�ne energy and carbon performance indicators

Metering analysis

2

Rising operating costs and increasing supply risk

USING ECO2MANTO IMPROVE

PERFORMANCE AT AN

OPERATIONAL AND SITE LEVEL

Monitor progress and verify performance

Review and prioritise projects

Secure support and implement

ECO2MAN

GTS23Report against target7

OUR AIM IS TO ACHIEVE THE MAXIMUM ECONOMICALLY SUSTAINABLE ENERGY AND CO2 EMISSIONS SAVINGS IN OUR BUSINESS

THE CHALLENGE:

Develop business plan

De�ne

Resource

OUR RESPONSE:

HOW WE WILL DELIVER IT

Technology

Operational e�ciency

INCREASING PRESSURE TO IMPROVE OUR PERFORMANCE

Business as Usual

Target

FACTS, STATS & NEWS

32 I JANUARY 2014

An environmental catastrophe waiting to happen could instead become a massive opportunity.

AMD – the toxic water seeping out of abandoned mines and into river systems – is being treated so successfully at a Mpumalanga plant that it is solving water and housing problems in the area in one fell swoop.

Environmentalists have hailed this new water-treatment system as the future in dealing with the crisis of AMD at abandoned mines. The water-treatment plant in Emalahleni, Mpumalanga, which belongs to Anglo American Thermal Coal, was the first to successfully treat acid mine drainage when it was commissioned in 2007.

But now the company has built 62 houses for workers using bricks made from gypsum, a waste product extracted during the treatment process. It also pumps millions of litres of water a day directly into the Emalahleni Local Municipality’s reservoirs – more than 20% of the council’s daily water requirements. The rest of the water is recycled and used within the mine.

Gypsum, which looks like a grey powder-like substance, is the mineral that experts say can change the face of construction and improve the pace of housing delivery.

John Quinn, project manager at Anglo American’s gypsum housing project, hopes government and the construction industry will see the benefits and ‘commercialise’ the production of the mineral to build homes partly made of gypsum.

The gypsum is used in place of river sand, which means only half the river sand will be used every time a brick is manufactured. But this can only be done if the water-treatment plants used to treat decanting AMD use the same process.

The gypsum bricks have been tested by the SA Bureau of Standards and were found to be as good as traditional bricks, which are mixed with concrete, river sand and water.

AMD is a severe problem in Gauteng and Mpumalanga. The toxic water is laden with heavy salts and metals, which – if allowed to seep into river systems – can poison crops and render valuable agricultural land useless for farming for decades.

Houses out of HazardsA progressive way to treat acid mine drainage (AMD) is cleaning up the water and producing houses.

Kate Mofo outside her

house in Emalahleni.

Anglo American is leading

the way in the mining industry

when it comes to providing

housing for workers.

JANUARY 2014 I 33

REAL DIFFERENCE

“This water treatment is the most prudent and sustainable way to treat the AMD.” – EnvironmEntal activist mariEttE liEffErink

By dealing with the crisis of AMD, particularly in Johannesburg, which is sitting on rising levels of toxic water, treatment plants can extract gypsum and sell it as an additive for cement or construct clay bricks for housing.

“There’s a big opportunity to turn a waste product into a resource. There’s also a large possible market for these bricks. The brick-making companies don’t have to make any changes. All they have to do is have another production line that makes these gypsum bricks. They don’t need to have special equipment,” said Quinn.

“It involves mixing clay, brown-sludge gypsum and water, and baking it in an oven like normal clay bricks.”

Quinn said the plant had the potential to produce between 100,000 and 150,000 gypsum bricks per day, with 100 tons of gypsum produced. These bricks could build between 15 and 20 houses a day, he said.

The Emalahleni plant currently produces more than 200 tons of gypsum a day, enough for 7,000 houses a year.

Kate Mofo (45) and her mine worker husband, Isaiah (56), were among the first to receive their three-bedroomed house in KwaMthunzi Vilakazi village, west of Emalahleni.

Three years after moving into the only house they have ever owned, Kate is still as ecstatic as the day she walked in for the first time.

“I know very little about this brick, but what I know is that the project has helped my husband, after many years of living in a mining hostel, to own our house,” she said.

“The feeling of being in your own garden, under your own roof, after more than 20 years working at the mine, is a gift from God.”

She and other mine workers have continued the recycling, using materials including bricks and panels from the demolished mine hostels nearby to build their driveway.

“Without the mine, we wouldn’t be able to own a house of our own. I have not had any problems since we moved into this house, but instead we are getting a clinic down the road, which will be very useful for all of us,” said Kate.

Environmental activist Mariette Liefferink – known for her extensive work around AMD and advocating for its treatment in Johannesburg, where the toxic water threatens dams, rivers and buildings – welcomed the gypsum development.

“The reverse osmosis process used to treat the water at Emalahleni is regarded around the world as the best of its kind,” she said.

“This water treatment is the most prudent and sustainable way to treat the AMD properly, instead of neutralising the water.

“It is like killing two birds with one stone . . . using the by-product to manufacture bricks for housing.”

Article by Xolani Mbanjwa originally published in City Press on 2 January 2013.

Platinum

r2,725 - r5,178Home ownership allowance (for ± 6,635 employees)

r1,737 per employeeLiving-out allowance (for ± 27,562 employees)

kumba iron orE

r1,250 - r2,830Home ownership allowance (for ± 5,373 employees)

184 employeesSubsidy for first-time home owners for the first five years of home ownership (formula-based)

thErmal coal

r5,242 - r7,532Housing allowance (for the 67% of the workforce living in their own accommodation): R5,242 less monthly rental charge of R2,600 (for skilled employees who are provided with accommodation)

DE bEErs

r800 - r1,200Water and electricity allowance

The houses are built with bricks

made from a percentage of

gypsum, produced as a waste

product at the Emalahleni water

treatment plant.

Business unitsHousing allowances, 2012

REAL DIFFERENCE

The Sebenza Fund, in partnership with the government’s Jobs Fund – managed by the Development Bank of

Southern Africa (DBSA) on behalf of the National Treasury – will showcase the importance of government and private sector partnerships and the impact that these partnerships can make in enterprise development.

Sebenza, meaning “to work” in isiZulu, is a fitting name for the Fund and will channel a combined R500 million over a three-year period into labour-sending areas and poverty nodes, with R250 million from the government’s Jobs Fund and a R250 million contribution from Anglo American. The goal is to sustain and create 8,000 new jobs and support 1,600 businesses by 2016. This is the fifth fund in the Zimele stable. It will focus solely on the alleviation of poverty and the creation of meaningful and sustainable employment throughout South Africa, but particularly poverty nodes.

The Fund is modelled on the successes of Zimele’s other funds and provides a community-based hub system which offers access to finance in the form of equity and/or loan finance at preferential interest rates, and non-financial

support such as business development support, mentorship, training, coaching and networking to entrepreneurs/SMEs.

Dr Lia Vangelatos, acting head of Zimele, said: “The launch of the Sebenza Fund was an extremely proud moment for our company, as the Fund has the potential to assist us considerably in providing employment opportunities and enhancing skills development with the intention of alleviating poverty. We are confident that the Fund will add substantive value to Zimele’s already successful model, and make a real difference in improving socio-economic conditions in South Africa by creating sustainable employment opportunities.”

PARTNERSHIPS FOR CHANGEAnglo American’s enterprise development initiative, Zimele, has launched its fifth fund – the Sebenza Fund – late last year.

Kutting, Mpumalanga’s 24-hour

mobile field service, on site

attending to hydraulic repairs on

a Terex machine.

The goal is to open 30 new small business development hubs and create and sustain 8,000 new jobs with 1,600 SMEs by 2016.

JANUARY 2014 I 35

KICK-STARTING ENTREPRENEURSThe Entrepreneur Internship Programme (EIP) aims to give entrepreneurs and established business-owners new skills to grow their businesses. Programme manager Bernd Schulz, learning & development manager for Supply Chain, gives the lowdown on the programme.

The EIP offers early-stage entrepreneurs and established business owners the opportunity for

business development support, industry exposure, mentoring and networking opportunities. At the end of the process, entrepreneurs are able to put together a business plan to start their new company or expand an existing one. Following thorough analysis, Anglo American’s enterprise development initiative, Zimele, may provide additional funding for those businesses that meet the criteria.

Following the successful graduation in March 2013 of five entrepreneurs from the first programme, which was launched in 2012, the programme will continue to accelerate real and sustainable economic development. It is a well-rounded programme, with entrepreneurs given the opportunity to be exposed to Anglo American’s business with a view to them starting a new local company or expanding an existing one, and potentially supplying goods or services back into the supply chain.

Thirty worthy participants were drawn from existing businesses (23) and individual start-up entrepreneur (seven) applicants. The application process was

open to anyone from the general public and included entrepreneurs from Zimele. Existing employees within Anglo American were also able to apply on condition that they resign if chosen. Potential candidates had to undergo a selection process that included an entrepreneurial aptitude assessment, one-on-one in-depth interviews, and a face-to-face panel interview. To qualify, they had to be 25 years old, have the relevant qualifications and work experience, and display a high aptitude for entrepreneurship and innovation. The ability of the start-up or existing business to create a significant number of additional jobs in the next one to two years was also an important criterion for selection.

Entrepreneurs access experiential on-the-job learning, including managing and growing business. This includes providing a mix of business planning support and exposure to ensure these individuals get their businesses up and running. Zimele supports the programme and coaches from the business incubator company, Aurik, facilitate the business development during the EIP to accelerate start-ups and take existing businesses to the next stage of development.

FAST TRACK START-UP ENTREPRENEURS: Ten months of business development support.

Induction: An introduction into the business of mining and building a business into a sustainable asset that can serve the mining or any other industry.

Induction into the business

of mining

Refining your idea for the

market

Building your idea into a business

Selling your business offering into the market

Reporting on numbers to support

fund-raising

Evaluation: Assessing the idea in terms of commercial objectives and market potential.

Building: Building the idea into a product or service offering based on the market assessment made above.

Selling: Defining the route to market to get the offering sold and generating cash flow.

Recording: Tracking the performance to support the funding that it may need, as well as to ensure that the business is on track to meet the objectives of creating a sustainable business.

EIP graduation ceremony:

Mkhokheli Mlilo (Sakhizwe

Engineering); Renier

Dreyer (Crunch Yard);

Sejako Morejwane (SPM

Engineering); Bernd Schulz

(Supply Chain Learning and

Development); and Tijen Diraz

(Supply Chain HR).

FACTS, STATS & NEWS

36 I JANUARY 2014

DIAMONDS: BUILDING CONSUMER CONFIDENCE When customers buy diamonds, they want to be sure that they haven’t helped fund conflict or finance a coup. Andrew Bone, head of international relations at Anglo American’s De Beers business unit, looks at how the company is playing a leading role in ensuring that diamonds traded globally are conflict-free.

01

JANUARY 2014 I 37

REAL DIFFERENCE

Diamonds evoke emotions and for decades the international diamond industry has relied on positive emotional

messages to promote the gems. However, the emotional value of a diamond is only what the consumer perceives it to be.

In 2000, the world’s attention was drawn to the atrocities being carried out by the rebel organisation, the Revolutionary United Front (RUF), in Sierra Leone and its sponsors in the Liberian government, led by Charles Taylor. It became apparent that, along with other minerals and commodities, financing for the RUF came from trade in illicit diamonds.

Clearly, a product that aspires to be associated with the highest human values should not be associated with the misery and destruction caused by armed conflict. To the consumer, a diamond is a symbol of love, commitment and self-esteem – qualities that the consumer understands and desires. And what the industry desires is to safeguard this view.

Without question, industry leaders have a central role to play in ensuring that diamonds are mined and traded in ways that ensure every gem which passes through the diamond value chain comes from ethical and properly managed sources.

Encouraged by civil society organisations and governments, the international diamond industry responded swiftly in an attempt to contain and eliminate the scourge of what became known as “conflict diamonds”. The result was the Kimberley Process Certification Scheme (KPCS), set up in 2000 – a unique tripartite structure that has helped bring an end to illegally financed conflicts in Sierra Leone, Liberia, Angola and the Democratic Republic of Congo. Today, it acts as a template for effective cross-sector co-operation.

For De Beers, preventing the sale of conflict diamonds has always been more than a security or business issue. It has, above all, been a humanitarian issue. De Beers continues

01 Kimberley Process

Certificate specimen and

rough diamonds.

02 & 03 Diamond sorters at the

Diamond Trading Company at

Harry Oppenheimer House

in Kimberley.

04 De Beers exhibition held

at Carlton House Terrace on

2 May 2012.

02

03

04

FACTS, STATS & NEWS

38 I JANUARY 2014

to be involved in a range of initiatives and organisations that encourage ethical behaviour across the diamond mining and production value chain.

Member states must ensure that all diamonds originating from that country do not finance rebel groups or other entities seeking to overthrow a UN-recognised government. In addition, a Kimberley Process certificate must accompany every diamond export and no diamond can be imported from or exported to a non-member of the scheme.

By restricting diamond revenues to government-approved sources, the Kimberley Process remains neutral towards different governments.

More than a decade after it launched, the Kimberley Process appears to be winning the fight against conflict diamonds. In June 2013, at an intercessional meeting of the Kimberley Process (under the chair of South Africa), South Africa’s Minister of Mineral Resources, Susan Shabangu, said that more than 99% of diamonds traded globally were now conflict-free and this had restored consumers’ confidence in the commodity.

The meeting saw representatives of governments, the diamond industry and civil society coalitions discussing methods to strengthen the effectiveness of the rough diamond certification scheme. Delegates also reviewed the processes and functions of the scheme in order to ensure they remain relevant and credible in curbing the illegal flow of diamonds.

The findings of the review missions and visits to ascertain compliance with the KPCS were considered, including the possibility of further review missions to Côte d’Ivoire and the Central African Republic. Technical support for compliance, as well as creating public awareness around the scheme, was also deliberated.

We have always said that the Kimberley Process is not a silver bullet – it is just one tool in a suite of initiatives to maintain and promote consumer confidence in diamonds. For instance, the De Beers Best Practice Principles, which have also been in place since 2000, are more than a set of ethical guidelines. They are an independently monitored framework for all business activities and those of the company’s major suppliers and contractors. They ensure that consumers can be confident that international ethical, social and environmental standards have been met in the production of De Beers’ diamonds.

De Beers is also a co-founder of the Responsible Jewellery Council, which aims to maintain ethical behaviour across the value chain, as well as the Diamond Development Initiative, which seeks to complement the regulatory solutions that the Kimberley Process offers by providing development solutions as well.

Through the Kimberley Process, the industry has learned that positive engagement with all stakeholders not only benefits the industry by allowing it to be part of the solution, but is also the most effective way to develop solutions that are sustainable because they involve all interested parties. A multi-stakeholder approach creates a sense of universal ownership and accountability, enabling all participants – from industry and non-governmental organisations to governments and communities – to feel as though they have made an investment in something important and lasting.

The KPCS was named after the town of Kimberley in South Africa’s Northern Cape province where SA’s first kimberlitic pipes were revealed in 1866 and where the discovery of the Star of Africa, an 83.5 carat rough diamond, triggered the first diamond rush in 1869. Kimberley is now the centre of De Beers’ South African diamond sorting operations, where the gems are sorted, valued and sold from Harry Oppenheimer House.

DID YOU KNOW?

We have always said that the Kimberley Process is not a silver bullet – it is just one tool in a suite of initiatives to maintain and promote consumer confidence in diamonds.

SIZWE MDIKANE New Vaal Colliery